Retirement to Australia - help me achieve my goal

savingforoz

Hi, I'm new to this site and I'm hoping others can help me decide the best way to achieve my goal, which is to retire to Australia. The earliest that I can do this is at age 55 (I'm now 44). My current situation is:

House owned outright - value £125,000
Savings £12,000
Regular savings £250pm into an ISA plus whatever is left at end of month
No debts (although will be starting stoozing soon!)
Current income £1470 net per month. Was £2300pm but have recently gone part time to set up as a nutritional therapist and life coach. Not able at present to take income from these businesses, although working on that one.

To retire to Oz, I need one of the following:
Either assets totalling AUS$870,000 (appox £373000)
Or assets totalling AUS$350,000 and an income of AUS$52000 pa (approx £150000 and £22300)

My current pension pot stands at about £40,000 and I contribute £100pm to Standard Life plus £10pm to an old style retirement annuity premium. Due to my drop in earnings I have been advised to contract back in to SERPS. My projected income from all pension sources at age 60 is c£10,000 pa at present.

I think it would be better to aim for the smaller capital sum plus the income.
I am considering buying a couple of buy to lets but am unsure about this because a) the market seems crowded and I don't want to do it just because it's the trendy thing to do and b) would need to buy on interest only so would need to consider how to repay the capital.

Should I work at getting my income back up to what it was before and beyond if possible, carrying on saving and get a deposit for the first buy to let, or is there a better way?

All help gratefully received!

rockpeblar

Sorry but I can't give you much advice about your finances.

However I have the same idea about retiring to Oz, currently 37, and fell in love with the place a couple of years ago. I have been looking into the entry requirements for Oz for the last few years and one thing I have noticed is that they change their requirements frequently.
For example the retirement visa requirements drastically changed a few months ago making it more difficult to gain the visa.
To keep track of the latest developments I would recommend that you contact newsletter@iscah.com
They issue a monthly e-mail newsletter which gives the latest info on visa changes and rumours.
Also take a look at the discussion forums on britishexpats.com

Good luck in your plans

rubber_soul_2

As far as your retirement income goes, (which you estimate at £10k p.a. at 60); this will presumably receive a boost when you start receiving your state pension entitlements at 65. This might take you up to the £15k p.a. level required for the visa.

Personally I would avoid buy-to-lets at the moment as property is presently overvalued, and if you can't repay the capital this would be pointless.

Have you got any equity-based investments? Why not set up a stocks and shares ISA, and invest as much per month as you can?

savingforoz

Thanks Rockpeblar, wasn't aware of that newsletter, will be good to keep track of any changes.
Rubber Soul, the £10,000 pa already includes the State pension entitlement. No equity based investments at present, but have been thinking about a stocks and shares ISA. Think my main aim over the next few months will be to boost my income back up, so I can save as much as I can - losing over £800 pm income hurts just a little! - but then thankfully I have no debts hanging over me.

ROCKINGHAM

Why wait - alternative therapy are very mainstream in Oz. Medicare will actually refunds patients that have opted for alternative therapies. Set up your own business down there. Aiming to do that this year - buying hairdressers hopefully which employs 3 Aussies - turnover of $200.000 a year should meet Business Visa requirement.

savingforoz

Didn't think of that Rockingham - are there any age limits on a Business Visa? Have emigrated to Oz before on a work visa, and am now too old to get that one again (wish I'd made things work there!). But a work visa could be something to consider, although I have obligations to elderly parents at present (but also 2 brothers who can carry on with that one).
There is lots to think about and somehow I can accomplish this, I know. I'm better placed than many due to having assets, no debts and skills that are in demand.
Thanks again.

Cook_County

I am not certain from your figures is to whether you are comparing spendability of money when you get there are or are thinking from a UK standpoint.

1. Right now UK tax is higher than all of Eastern Europe but a bit lower than Australian. What will Australian tax rates be when you get there?

2. You will of course roll all of your accumumulated UK pensions to Australian super when you get there to avoid the FIF regime. What annual net of Australian tax income will that entitle you to?

3. What is Sterling going to be worth versus Australian dollars when you retire? Is Sterling going to crash and if so do you want to hedge now while Sterling is strong? Can you not just buy Australian $ Denominated investments over the next few years if this is where you intend to retire?

ROCKINGHAM

Sorry had to go food shopping - battle for a parking space - battle round the supermarket - quality of life is what I am after now. All my family live in Oz and as for taxes yes they do pay them but they don't pay anyway near what I have to. Cost of living is cheaper there too.

Visa requirements can be found on the Australian Immigration site - I just googled Australian Visa.

Have already set up account in Oz and transfer monies as and when. I believe you can apply for a Business Visa when you are in Oz - that said rules change all the time but they do have Immigration Agents down there to assist.

My sister's sister in law has just got her visa - she's 47 and a nurse - she had a telephone interview with a hospital and was accepted - the only requirement is that she has to work full time for 2 years in a Public hospital.

Why don't you take a holiday down there and use it as a fact finding mission.

EdInvestor

In most areas of Australia the cost of housing is much lower than the UK, so you should be able to release some equity there to generate some more income.

superscotsman

I am not certain but I would be surprised if Australia did not have a reciprocal agreement with Rip Off Britain with regards to social security benefits. You will have to check with the social security office and with the Australian embassy/high commision whether or not you would be able to get a state old age pension out there. You may receive other UK benefits like war pensions that can also be paid to you out there.

The housing out there can be a little odd compared to housing in Rip Off Britain. It is quite common for people with ordinary jobs to have a swimming pool in the back garden. I am not exaggerating. I was working in London back in the 1970s, and I was working with a lot of Australians who were over here during their gap year. And they were telling me about their lifestyles back home. They also introduced me to various Australian items as Resch's Foster's, Tooth's, Carlton's - as well as the famous Vegemite.

savingforoz

I am still thinking about the buy to let route. Although I am a diligent saver, I can't see how I can save enough over the next 10 - 15 years to generate £15,000 more income. However, if I get say 2 buy to lets, on interest only payments, sell them in 10 - 15 years, pay the CGT (ouch) then wouldn't the (presumed) capital appreciation give enough capital to generate some income? For example:
Buy 2 houses near where I live (Prices are cheap and I know the area) for £125,000 each. Deposit on each at 15% £18,750, so mortgage = £106,250 each. They say houses roughly add 100% in value every 6 years - assuming this holds true, in 12 years both houses worth together £750,000 (?! really?). Sell to repay mortgage, less CGT say £110,000 (eek!). Sales proceeds £750,000 less CGT £110,000 less mortgages £212,500 = £427,5000 to invest. Now I know I've not taken into account time value of money etc, was trying to keep it simple. Wouldn't this produce the £15,000 income i'm after? Or am I missing something?

Edinvestor, thanks for the point about the cheaper housing in Oz - good point. Money should go further out there.